T Rowe Price 401k plan

[csanch11]

I'm in the process of enrolling in a 401k with trowprice. I'm a bit confused in this enrollment stage (screenshot below). There's the Roth 401k and the Pretax selection. My assumption is that the Pretax is the traditional 401k account? If so, why do they give you the choice of opening both traditional and Roth 401K accounts? 

[Lou S.]

Probably because the Plan allows for ROTH-401(k) contributions would be my guess but why not call T Rowe Price for clarification.

[Bird]

14 hours ago, csanch11 said:

If so, why do they give you the choice of opening both traditional and Roth 401K accounts? 

You're allowed to have both - you could do, say, 2% to traditional and 2% to Roth.

[Rachel]

Roth 401k contributions are generally after-tax but still go into your 401k plan and are subject to the same 401k rules, i.e., contribution limits, withdrawal rules, etc.  The difference is you are paying taxes at the time you contribute versus when you withdrawal (unless you don't meet the withdrawal requirements of holding the account for at least 5 years and being age 59.5 when you withdrawal).

https://www.betterment.com/resources/traditional-or-roth-401k-decide-with-this-401k-calculator/

[RatherBeGolfing]

1 hour ago, Rachel said:

Roth 401k contributions are generally after-tax...

Generally?